It often takes a series of intermediaries to complete a single cross-border payment. While most stages of the process have become significantly faster, the final leg of the journey continues to drive delays and costs.
Global messaging network Swift plays a central role in facilitating international transactions, and the organization recently studied payment processing times across 40 markets. The research found that roughly half of all transactions on Swift’s network reach recipient institutions within 40 seconds.
This suggests that much of the remaining friction in cross-border payments occurs after a transaction reaches the receiving institution but before the funds are credited to the beneficiary’s account—a stage commonly known as the last mile.
Swift sees greater connectivity between international payment networks and domestic instant payment systems as one way to narrow this gap. Faster connections between the could reduce delays, improve payment transparency, and give financial institutions a more predictable experience to offer their customers.
Falling Short of the Roadmap
Swift’s findings underscore how some of the most persistent challenges in cross-border payments remain unsolved, despite years of work by the financial industry and regulators toward a Group of 20 (G20) roadmap designed to improve cross-border payments by next year.
While there has been some progress toward these objectives, including the implementation of the ISO 20022 messaging protocol and the stronger anti-money laundering standards, high fees, delays, and limited transparency continue to affect international transactions.
Spearheading Improvements
Even as these challenges persist, new initiatives aimed at improving international payments continue to emerge, many spearheaded by Swift. The organization recently developed a framework for retail cross-border payments, driven in part by growing consumer demand for cross-border payments and remittances in major markets.
Swift also highlighted the framework’s performance since its launch in June. Some transactions have already been completed in seconds, including a payment from Australia to India in 37 seconds and another from Brazil to the U.S. in one minute.
Beyond retail payments, Swift has been involved in several other initiatives, including testing tokenized deposits transfers across its network and developing a proof of concept for using alias identifiers in cross-border transactions. The concept would allow banks to use identifiers like phone numbers and email addresses to send international payments.
Despite this momentum, many of these initiatives remain in the early stages and are still some distance from mainstream adoption. For now, getting a cross-border payment across the finish line is likely an ongoing challenge for the industry.